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Thursday, Feb 20, 2003

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ABB sheds hierarchy, goes `egalitarian'

Anjali Prayag


THE next time you are travelling by train from Mumbai to Baroda, don't be surprised if you find yourself in elite company like Mr Ravi Uppal, Managing Director, ABB, or any of the company's other top executives.

For ABB is shedding all the hang-ups of a traditional hierarchical structure. Says Mr P.C. Rajiv, Head, Human Resources, India, ABB Ltd, "Pay for performance and grade-less structure is the new HR mantra here and this is a big hit with our 3,200 employees."

In an effort to augment this `flat model', several changes in the internal workings of the company have been initiated. "First of all we have removed all visible differences among employees," says Mr Rajiv. Walking this egalitarian talk is Mr Uppal himself, who now sits in the large hall with his other engineers. This also means that every executive travels economy class, stays in company guest houses and the drives the car of his choice and not what his position demands.

Last year, when the company decided to reorganise itself internally, the first thing that was put in place was the plural leadership system. Explains Mr Rajiv: "This is something very unique in the corporate world. Even the so-called knowledge industries do not have anything like this, not even other ABB subsidiaries elsewhere in the world."

The company's two divisions - Automation Technologies and Power Technologies - are divided into various business areas: High Voltage Products, Medium Voltage Products, Power Transformers, Drives and Motors, etc. Each business area functions as an enterprise by a Business Area Council comprising the Finance Controller, Business Area Manager, Technical Head, Quality and Manufacturing Head and Marketing Head. "When we saw that the jump in revenue was 50 per cent in two years, we realised we were on the right track," says Mr Rajiv.

The company's reorganisation moves had an impact in various areas: When the corporate office shifted from Delhi to Bangalore in April 2002, it seemed the right time to initiate a `repositioning exercise'. Apart from the technical upgradation for support functions, the company decided to go in for a culture shift. "This meant recognising the drivers, paying for performance, speeding up the internal decision making process and giving entitlements that are role-based rather than level-based."

In 1998, when ABB lost about 40 of its most talented engineers to the IT industry, the company did not lose sleep over it. "Instead we said, let's make the exit as honourable as possible because we may need them someday," reveals Mr Rajiv, adding, "Today we have 20 of them back in our fold at our IT Centre." This year, apart from the 44 engineering colleges that the company goes to every year for campus recruitment, ABB will also set foot into the IIMs and IITs. Yet another new wave in the churning that ABB India is going through.

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